frican-American Medicare beneficiaries age 65 and older are more than twice as
likely as elderly white beneficiaries to report they could not afford to fill at least one
prescription in the last year, according to a new study by the Center for Studying
Health System Change (HSC). Older African-American beneficiaries are much more
likely to be poor and to lack supplemental insurance. They also are more likely to live
with certain chronic conditions—heart disease, high blood pressure and diabetes—
that generally require prescription drug treatment. As policy makers debate how to
structure a Medicare drug benefit, designing a comprehensive benefit with minimal
out-of-pocket costs for low-income elderly Americans could substantially narrow
the prescription drug gap between black and white seniors.

Black Seniors More Likely to Go Without Prescriptions

rescription drugs are an essential
aspect of modern medical care,
especially for older Americans. Since
Medicare does not cover most outpatient
prescription drugs, elderly Americans
often have trouble affording the drugs
they need to stay healthy and active.

Nationwide, about one in 12 Medicare beneficiaries age 65 and older 1
reported they could not afford to fill at least one prescription in the previous
year, according to HSCs 2001 Community Tracking Study Household Survey (see
Figure 1). Other research indicates many seniors also
may skip doses to stretch prescriptions or go without other necessities to buy
medications. 2

African-American seniors clearly have
more problems affording prescription
medications. Almost one in six elderly
black Medicare beneficiaries could not
afford to fill at least one prescription in
2001, compared with one in 15 elderly
whites. African Americans lower
incomes, lack of supplemental insurance
and greater prevalence of certain chronic
conditions all contribute to the prescription
drug access gap between
older black and white Americans.

Figure 1
Medicare Beneficiaries 65 and Older Who Did Not Purchase at Least One Prescription
Drug in 2001 Because of Cost by Race

Income Matters

Poor elderly Medicare beneficiaries—those with incomes below 100 percent
of the federal poverty level, or $8,590 for a single person in 2001—are nearly
three times as likely as beneficiaries with incomes above 200 percent of poverty
to report not filling at least one prescription because of cost (see Figure
2). Low-income older Americans—those with incomes between 100 percent
and 200 percent of poverty—are twice as likely as those with higher incomes
to have gone without at least one prescription in the previous year.

The lower incomes of older African Americans partially explain why they are
less likely than whites to fill all of their prescriptions (see Table
1).Nearly four in 10 elderly black Medicare beneficiaries lived in poverty
in 2001, compared with one in 10 whites (see Table 2).
About two in 10 older black and white Americans had incomes between 100 percent
and 200 percent of poverty, while four in 10 elderly African Americans had incomes
above 200 percent of poverty, compared with more than six in 10 older whites.

Figure 2
Medicare Beneficiaries 65 and
Older Who Did Not Purchase at
Least One Prescription Drug in
2001 Because of Cost by Income

Table 2
Income Distribution and Supplemental Insurance of Medicare Beneficiaries
65 and Older in 2001 by Race

White

African American

Income/Poverty Status

Low Income (Between 100% and 200% Poverty)

23%

21%

Higher Income (200+% Poverty)

66

41*

Type of Supplemental Insurance

Medicare Plus Job-Sponsored Supplemental

32

20*

Medicare Plus Other Private Supplemental

33

19*

Medicare HMO

20

20

Medicare Plus Other Public

5

13*

Traditional Medicare Only

10

27*

*African-American/white comparison
is statistically significant at pNotes:Medicare beneficiaries limited
to noninstitutionalized population. Both racial categories exclude persons
of Latino ethnicity. Columns may not sum to 100 due to rounding.

Supplemental Insurance Helps

Supplemental health insurance, which may
include some drug coverage, helps many
elderly Medicare beneficiaries afford prescription
drugs (see Figure 3). In 2001, less
than 3 percent of elderly Medicare beneficiaries
with job-sponsored supplemental
insurance said they could not afford to fill
at least one prescription. In contrast, nearly
14 percent of beneficiaries whose only
coverage was traditional fee-for-service
Medicare reported problems affording
prescription drugs.

To a lesser extent, other types of public
and private supplemental insurance
decreased the proportion of Medicare
beneficiaries reporting problems affording
prescription drugs.

The different pattern of supplemental coverage for elderly black and white
Medicare beneficiaries helps to explain the prescription drug access gap between
blacks and whites (see Table 2). African-American beneficiaries
are much more likely to lack supplemental coverage, with nearly 30 percent of
older blacks in 2001 having only traditional fee-for- service Medicare coverage,
compared with 10 percent of whites.

Close to 40 percent of elderly black
Americans had private supplemental
insurance in 2001, whether through a former
employer or directly purchased, compared
with 65 percent of white beneficiaries.
Reflecting their greater likelihood of being
poor, 13 percent of elderly black Medicare
beneficiaries had supplemental public coverage,
such as Medicaid, compared with 5
percent of whites.About the same proportion
(20%) of elderly black and white beneficiaries
were enrolled in health maintenance organizations,
such as Medicare+Choice.

Figure 3
Medicare Beneficiaries 65 and Older Who Did Not Purchase at Least One Prescription
Drug in 2001 Because of Cost by Type of Supplemental Insurance

The Role of Health

Elderly Medicare beneficiaries living with chronic conditions 3
are more likely to have problems affording prescription drugs (see Figure
4). Certain chronic conditions—heart disease, high blood pressure
and diabetes, for example—usually require treatment with prescription drugs,
and going without prescribed medications can pose serious health consequences.
For example, complications of adult-onset diabetes, such as renal failure, blindness
and gangrene, often can be avoided when blood sugar is regulated through diet
and appropriate use of prescription drugs. Elderly Medicare beneficiaries with
heart disease, high blood pressure and/or diabetes were twice as likely as those
with no chronic condition to have problems affording prescription drugs, and
beneficiaries with multiple chronic conditions were 2.5 times as likely to have
problems.

About 30 percent of both elderly black and white Medicare beneficiaries
live with one chronic condition. However, black beneficiaries are more likely
to have multiple chronic conditions—48 percent of blacks vs. 42 percent of whites.
At age 65, life expectancy for white Medicare beneficiaries is 10 percent higher
than for African Americans. 4 Chronic conditions
such as heart disease, high blood pressure and diabetes contribute significantly
to these differences in life expectancy. 5 Elderly
black Medicare beneficiaries are more likely than whites to live with heart
disease, high blood pressure and diabetes—67 percent of blacks vs. 55 percent
of whites.

Figure 4
Medicare Beneficiaries 65 and
Older Who Did Not Purchase at
Least One Prescription Drug in
2001 Because of Cost by Income

Other Disparities

Multivariate analysis indicates that
differences in income, supplemental
insurance coverage and presence of chronic
conditions account for close to half (46%)
of the 10-percentage-point gap in prescription
drug access between black and
white seniors. Another portion of the
gap—nearly 20 percent—is explained
by other socioeconomic factors, such as
gender, age, family size and education. 6

The remaining prescription drug access
gap between black and white Medicare
beneficiaries likely results from a variety
of other influences. For example, research
indicates that wealth—savings or other
assets—is a factor in elderly Medicare beneficiaries
ability to pay for medical care
not covered by Medicare, including prescription
drugs. 7 Since people with savings,
for example, do not need to rely exclusively
on income to afford prescription drugs,
differences in wealth may explain some of
the remaining access gap between black
and white beneficiaries.

Policy Implications

lthough about two-thirds of elderly Medicare beneficiaries
have some prescription drug coverage through a patchwork of public and private
sources, 8 access to affordable prescription drugs
is likely to be a growing problem for American seniors. Employers are scaling
back retiree coverage, state budget shortfalls may curtail Medicaid drug coverage
for seniors and many Medicare+Choice plans have reduced prescription drug coverage
in recent years.

The U.S. House and Senate both recently passed legislation
to provide Medicare outpatient prescription drug benefits. Although details
of the two chambers proposals differ significantly, both provide targeted assistance
to some low-income beneficiaries—particularly those with incomes up to 135 percent
of poverty—through premium subsidies and reduced cost sharing. 9

While either proposal, if enacted, could help reduce racial disparities in access
to prescription drugs among the poorest beneficiaries, both proposals would
leave many low-income beneficiaries—those with incomes above 135 percent but
below 200 percent of poverty—with substantial out-of-pocket costs relative to
their incomes if they need ongoing or expensive drug therapies. Other research
has shown that even minimal patient cost-sharing requirements can pose barriers
to low-income people.

Creating a comprehensive Medicare prescription drug benefit
with minimal out-of-pocket costs for all elderly Americans with incomes below
200 percent of poverty could significantly narrow the access gap between black
and white seniors.

Data Source

his Issue Brief presents findings from
the HSC Community Tracking Study
Household Survey, a nationally representative
telephone survey of the civilian,
noninstitutionalized population
conducted in 2000-01. Data were
supplemented by in-person interviews
of households without telephones to
ensure proper representation. The
survey contains information on about
60,000 people, including approximately
7,700 elderly Medicare beneficiaries,
and the response rate was 59 percent.
Estimates in the Issue Brief reflect the
percentage of Medicare beneficiaries
who responded "yes" to the following
question: "During the past 12 months,
was there any time you needed prescription
medicines but didnt get
them because you couldnt afford
it?" More detailed information on
survey methodology can be found at
www.hschange.org.

Individuals were classified as having a chronic
condition if they reported seeing a doctor or
other health professional in the past two years
for at least one of the following conditions:
diabetes, arthritis, asthma, chronic obstructive
pulmonary disease, heart disease, hypertension,
cancer or depression.

Full model includes race/ethnic category, income, supplemental insurance
type, number of chronic conditions, gender, age, family size and status,
education, employer type, smoking status, health as measured by the SF-12
and cost of living index. Details and results of multivariate model can
be found at www.hschange.org/index.cgi?func=supp.

The House legislation (H.R. 1) provides premium
and cost-sharing assistance up to 135 percent
of the federal poverty level and full or partial
premium assistance up to 150 percent of
poverty; the Senate legislation (S. 1) provides full
or partial premium and cost-sharing assistance
up to 160 percent of poverty. Both bills limit the
amount of assets that qualifying beneficiaries
can own.